The CRC Energy Efficiency Scheme (formerly known as the Carbon
Reduction Commitment) is a mandatory carbon emissions reporting and
pricing scheme to cover all organisations in the UK (excluding
state funded schools in England from April 2013), using more than
6,000MWh per year of electricity.
The scheme is managed, on behalf of the UK Government's
Department of Energy & Climate Change (DECC), by the
Environment Agency (in England and Wales), by the Scottish
Environment Protection Agency (in Scotland), and by the Department
of the Environment Northern Ireland (in Northern Ireland).
Simplification of the CRC Energy Efficiency Scheme
- On 10 December 2012 the UK Government published its consultation
response on simplification of the CRC Energy Efficiency Scheme
(CRC). Details of this consultation and subsequent changes can be
found on the UK Government's website. The information on
this page reflects our understanding of the scheme as it now
stands, including the recent changes.
How it works
The CRC comprises three primary elements:
1. Emissions reporting requirement
Participants in the CRC need to measure and report their
electricity and gas related carbon emissions annually (further
sources of emissions were included in the earlier years of the
scheme), following a specific set of measurement rules.
The CRC scheme applies to emissions not already covered by
Climate Change Agreements (CCAs) and the EU Emissions
Trading System (EU ETS).
2. A carbon price
The scheme requires participants to buy allowances for every
tonne of carbon they emit (relating to electricity and gas), as
reported under the scheme.
Participants are required to buy allowances from Government each
year to cover their reported emissions. This means that
organisations that decrease their emissions can lower their costs
under the CRC.
During Phase 1 of the scheme, only one sale of allowances took
place at the beginning of each year, to cover emissions in the
previous year. The price of the allowances is currently set at £12
per tonne of CO2 for 2011/12 reporting year.
From Phase 2 (which started in April 2013), there will be two
sales of allowances for each compliance year. The first sale at the
start of a compliance year will be based on predicted emissions at
a lower price. The second will be a "buy to comply" sale after the
end of the compliance year at an expected higher price.
3. Publishing of information on participants' energy use
and emissions
In the first years of the scheme, a CRC performance league table
was published showing how each participant was performing compared
to others in the scheme, based on a number of metrics including
absolute and growth-adjusted reduction of emissions. The 2011/2012
CRC performance league table can be seen on the Environment Agency website.
After July 2013, these league and performance tables will no
longer be published, and will instead be replaced by a publication
of participants' energy use and emissions.
Background
The sectors targeted by the Carbon Reduction Commitment scheme
generate over 10% of UK Carbon Dioxide (CO2) emissions, around 55
MtCO2. The Carbon Reduction Commitment scheme aims to reduce
non-traded carbon emissions by 17 million tonnes by 2027. It
supports the UK Government's objective to achieve an 80% reduction
in UK carbon emissions by 2050.
The Carbon Reduction Commitment scheme was announced by the UK
Government in the Energy White Paper (May 2007). The need for an
incentive in this sector was originally highlighted by the Carbon
Trust, in our report The UK
Climate Change Programme: Potential evolution for business and the
public sector.
What does it mean for your
organisation?
Improving your energy efficiency will save you money and improve
your organisation's reputation. The CRC further strengthens the
business case for doing this.
Position your organisation for maximum
savings
There is a clear financial incentive to perform well in the CRC.
You will reduce the number of emissions allowances you need to buy
if you cut emissions, putting you at a cost advantage to
competitors that have not cut emissions.
There is a clear financial incentive to perform well in the CRC.
You will reduce the number of emissions allowances you need to buy
if you cut emissions, putting you at a cost advantage to
competitors that have not cut emissions.
Find out how our Business advice and Footprinting
certification services can help your organisation
perform well in the CRC and prepare for mandatory carbon
reporting.
An opportunity to enhance your business
reputation
As well as the financial benefits of achieving emissions
reductions, you will also be better positioned to reap the
reputational benefits associated with these reductions. The Carbon
Trust can help you to do this, including through the Carbon Trust
Standard.
Further information
Visit DECC's CRC Energy Efficiency
Scheme site